When you are appointed as an executor of a trust, you are given a great responsibility to honor the wishes of your deceased loved one. You will be given the task of distributing all assets laid out in the trust to the intended beneficiaries. These assets can include real estate, stocks, bonds, investments, finances, and even valuable possessions like jewelry and artwork.
What Is the Role of an Executor?
An executor may be assigned their task by one of two entities. They may have been appointed by the deceased before their passing. They may also be given this task by the court if the deceased had not previously assigned an executor.
Ideally, an executor would have been given the opportunity to speak with the deceased before their passing regarding all their wishes and desires for distribution. However, it is not always that easy. If the executor has been court-assigned, it is likely they were never given the chance to speak to the deceased before their passing. Even so, they must now do their best to abide by the decedent’s wishes.
How Long Does Distribution Normally Take?
The time it takes to distribute assets can vary from case to case. The executor should follow the terms laid out in the trust and distribute assets based on these terms. For example, in some cases, a beneficiary may not be allowed to receive all of their assets in one lump sum. This is often the case for minors, whose assets are usually distributed to them on or after their 18th birthday or in small portions for a certain amount of time. This may also be the case for individuals who are not deemed competent enough to receive the total sum of their assets at one time. The executor is then responsible for making sure these beneficiaries receive their assets in the manner stated in the trust.
If a trust calls for a one-time distribution of assets, meaning that all assets are distributed to beneficiaries in one lump sum, then the process of the trust being distributed can take on average 12 to 18 months. However, complications in probate court and issues with clarity within the trust can prolong this process. The most complicated distribution cases can take over two years to be completely finalized.
Can an Executor Refuse to Distribute Assets?
In some cases, the trust may ask the executor to withhold distributing assets for a given period. If the trust gives the executor discretionary authority, the executor may withhold assets from the beneficiary. However, they must be able to demonstrate that the beneficiary is not entitled to receive them at the time.
Other trusts may have age limits or restrictions put on the beneficiary before they are allowed to receive their assets. One example would be for a child to complete their education before receiving these assets. In this case, the executor would be responsible for temporarily withholding these assets. They will later distribute them accordingly when the time comes.
If an executor is not required to refuse distributing assets, then the beneficiary can pursue legal action against them. The probate court may then force the executor to distribute the assets. If they do not comply, the court has the authority to remove them from their position and replace them with someone else.
FAQs
Q: How long does it take to settle an estate with a trust in California?
A: There is not a set time that it will take for a trust to be distributed. Most trusts end once all assets are distributed or the trustor dies. However, a trust can stay open for 21 years after the death of the individual who created it.
In some cases, the beneficiary will not receive all the assets at once but will instead receive payments over time. This can happen in cases where the beneficiary is proven to lack competence.
Q: How long does an executor have to distribute funds in California?
A: Once a trust is put through probate, it can take, on average, 12 to 18 months for all the assets to be distributed to the beneficiaries. In some cases, if the trust is very clear and does not contain any issues, the probate process can take as little as nine months. However, this is not very common and should not be expected. More complicated cases can take two years or longer to be fully distributed.
Q: What is the 65-day rule for trusts?
A: If you have received money from a trust, this is considered taxable income. Under the 65-day rule, beneficiaries can choose to shift some of the income to the first 65 days of the following tax year. This would help reduce the beneficiaries’ taxable income in a single year. This is useful to beneficiaries who fall into a lower tax bracket and who want to stay in that tax bracket to avoid paying more money in taxes.
Q: How long does it take for money to be distributed from a trust?
A: In an ideal situation, a trust should be fully distributed to all heirs between 12 and 18 months after the decedent’s death. However, certain factors can affect this process. In some cases, the heir may be a child who will not receive their distribution until they are of age. If the estate is more complex or there are issues with the creation of the trust, it may end up taking longer.
The Flanigan Law Group: Your Trust Attorneys
If you are an executor in charge of handling or distributing a trust, or you are a beneficiary waiting to receive your share of assets from a trust, an Orange County Trust Administration Lawyer can help set your mind at ease. Our team at The Flanigan Law Group can help you understand these complex legal proceedings. We can compile evidence in your favor to increase your chances of success. Our attorneys are passionate and can work with you on a personal level, getting to know you and your unique case. Contact us today to get started.